Three Different Pricing Objectives Relate to a Firm's Profit

question 189

Multiple Choice

Three different pricing objectives relate to a firm's profit. One objective, known as ________, occurs when a firm sets a profit goal, usually determined by its board of directors.

• A) maximizing current profit
• B) managing for long-run profits
• C) target return
• D) break-even strategy
• E) minimizing risk

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Definitions:

Lease Option

A contract that permits a party to lease real property while holding an option to purchase that property.

Real Property

Land and anything permanently attached to it, such as buildings and structures, considered immovable.

Option Contract

A contract granting the option holder the right, but not the obligation, to buy or sell an asset at a predetermined price within a specified time period.

Legal Consideration

Something of value that is promised in exchange for performing an act or refraining from acting, forming a necessary element of a valid contract.